Cabinet 'broadly' approves 74 per cent FDI in telecom

New Delhi, Dec 21 (UNI) The Union Cabinet has 'broadly approved' the proposal for enhancment of Foreign Direct Investment (FDI) limit to up to 74 per cent in the telecom sector but final and revised guidelines are in the process of being redrafted and would get the final nod in the first week of January, Finance Minister P Chidambaram said today.

Speaking after a Cabinet meeting here, Mr Chidambaram said guidelines, especially the norms on public switched telephone network (PSTN), have to be redrafted.

The government had earlier this year allowed 74 per cent FDI in telecom but the policy could not be implemented due to differences among the different ministries over various clauses including national security.

The revised note on FDI has been broadly approved and the matter ''will come back for formal approval in the first ten days of January,'' the Minister said.

The appointment for foreign CEOs will also be a part of the revised and final nod from the cabinet, Mr Chidamabaram said.

The Department of Telecom (DoT) has proposed that chief officer in-charge of technical network operations, chief security officer and majority of the directors should be resident Indian citizens.

"The position of chairman, managing director, CEO and chief financial officer, if held by a foreign national, the same will be required to be security vetted by the Ministry of Home Affairs," a draft note on FDI in telecom had pointed out.

It added that security vetting would be required periodically on an annual basis.

FDI up to 49 per cent would continue to be on automatic route and Foreign Investment Promotion Board (FIPB) approval would be required for FDI in companies if it has a bearing on the overall ceiling of 74 per cent, the note said.

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